Calvin Hennick is a freelance journalist who specializes in business and technology writing. He is a contributor to the CDW family of technology magazines.

As an industry that has enjoyed a monopoly status for decades, the utility sector at first lagged behind other industries when it came to digital transformation. Now that new competition has arrived, customer expectations are changing, and utilities are moving more rapidly toward digitalization in response.

Digital transformation can yield substantial, concrete benefits for utility companies, their customers and their workers. By embracing digital technologies to transform operations and systems, they can reduce operating expenses by up to 25 percent and achieve performance gains of 20 to 40 percent in areas such as safety, reliability, customer satisfaction and regulatory compliance, according to McKinsey.

A big part of embracing digital transformation is embracing cloud computing. Increasingly, utilities are choosing the cloud for workloads such as smart meter infrastructure, data management, billing and more.

Here are five ways utilities are utilizing the cloud.

1. Cloud Offloads Routine IT Tasks

By offloading certain routine tasks to the cloud, Oracle notes, utilities can reduce IT operating costs and spend more time focusing on innovation. These resources might include customer care and billing as well as meter data. As utilities replace custom legacy systems built on older technology, they may use this as an opportunity to move to cloud applications rather than making large capital expenditures for new on-premises infrastructure.

2. Utilities Address Temporary IT Needs With Cloud

Because cloud resources can be rapidly spun up and then decommissioned when they’re no longer needed, the cloud is an ideal fit for temporary IT projects. Rather than purchasing expensive on-premises hardware that may sit unused after a major project is finished, utilities can treat the cloud as an on-demand source of IT infrastructure.

“Cloud technology allows for a quick start to projects without the initial spike in setup costs,” notes Microsoft in a report on cloud transitions among water utilities. “Compute power can be scaled up or down on demand; and prototypes can be provisioned for a ‘fail fast’ ability.”

For instance, utilities might run their test and development environments in the cloud, utilize cloud resources for temporary analytics projects or use a cloud solution to support a major (but finite) project, such as work management and scheduling for the installation of smart meters.

3. The Cloud Helps Manage Contracted Work

The cloud can be a good fit for supporting contracted work such as meter installation, tree trimming or emergency situations. “By spinning up a cloud system,” Oracle notes, “utilities can allow workers to take millions of calls from the affected geographies, assign thousands of mutual aid crews who might be working on a contracted basis, and avoid traditional IT start-up barriers.”

4. Utilities Get Support for New Service Offerings

At times, utilities may need to continue operating a legacy system for several more years before replacing it, while also meeting their customers’ increasing expectations through new service offerings. While a legacy system may not be capable of meeting the demands of both existing applications and those needed to support new services, utilities can complement their existing technology with cloud resources.

5. Cloud Solutions Fuel Innovation

Because utilities can take advantage the cloud’s capabilities without taking on large capital expenditures, they can use the cloud as something of a canvass for low-risk experimentation. For instance, Oracle suggests, utilities might try the following: prototyping and testing new demand-side management applications, both to modify load shape and to enhance customer service; assembling and piloting substation asset management in a cloud application; or attempting to “stitch together” multiple cloud technologies in a way that better meets IT needs.

The great thing about the cloud? If a project doesn’t work, utilities can simply decommission this infrastructure. Or, they can spin the resources back up and try again.